ACCC gives green light to Asahi's $16b buyout of CUB

Japanese giant Asahi will set up a separate division to oversee the sale of three cider brands, including Strongbow, and the Australian rights to beer brands Stella Artois and Beck's, after gaining clearance from the competition regulator for the $16 billion buyout of Carlton & United Breweries.

The Australian Competition and Consumer Commission gave the all-clear on Wednesday to the Asahi acquisition of CUB, the market leader in Australia, eight months after the proposed acquisition was announced. But it will strictly enforce undertakings given by Asahi that the buyers of the brands to be sold will have the same access to shelf space at retailers and on-tap arrangements at pubs, clubs and bars as Asahi has now.

Crown Lager, Carlton Draught and Victoria Bitter are among the main beer brands made by CUB. Joe Armao

Asahi said it had agreed to divest the three cider brands – Strongbow, Little Green and Bonamy's – and international beer brands Stella Artois and Beck's, and would ''establish a stand-alone, independent business unit to help manage the divestment of these brands''.

CUB also makes Crown Lager and Pure Blonde and currently holds close to 49 per cent of the $14 billion beer market in Australia.

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The deal still requires the approval of the Foreign Investment Review Board, and the ACCC needs to ratify any future buyer of the brands being sold off.

ACCC chairman Rod Sims said that without the divestments, the acquisition would substantially reduce competition in the cider market and "remove a vigorous and effective competitor in the beer market''.

Cider sales

He said the combined Asahi-CUB company would have accounted for two-thirds of cider sales in Australia, and owned the two largest cider brands, Somersby and Strongbow.

The sale of the three cider brands and the local rights to the international beer brands would be enough to address the competition concerns, and allow another business to play an ''important role in a relatively concentrated industry''.

Mr Sims said Asahi and CUB currently competed closely in the sale of premium international beers.

Asahi has provided a court-enforceable undertaking to the ACCC to divest the five brands. Mr Sims said the undertaking also required it to ensure that divested brands got the same access to bars, pubs and clubs as well as off-premise space under tap-tying agreements as Asahi’s brands for the next three years.

CUB’s parent, AB InBev, has also provided a court-enforceable undertaking to facilitate and not unreasonably withhold consent to the transfer of relevant beer brand rights and obligations to the future buyer or buyers.

Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com

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